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Filed by Deutsche Telekom AG

pursuant to Rule 425 under the Securities Act of 1933

Subject Company:    T-Online International

AG Exchange Act File Number 82-5125

This document is a convenience translation of the German language original. In case of discrepancy between the English and German versions, the German version shall prevail.

MERGER AGREEMENT

between

T-Online International AG
having its registered office in Darmstadt

(hereinafter referred to as "TOI AG")

—as the transferring entity—

and

Deutsche Telekom AG
having its registered office in Bonn

(hereinafter referred to as "DTAG")

—as the acquiring entity—


Preamble

        On 8 November 2004, TOI AG and DTAG entered into an Agreement in Principle concerning the combination of both companies. This agreement sets forth certain principles for the procedure intended to result in the merger and the future corporate structure. The Agreement in Principle and its annexes are appended to this Merger Agreement as Annex 1.

        NOW THEREFORE, the parties hereby agree as follows:


§ 1
Transfer of Assets

(1)
TOI AG shall transfer all its assets in their entirety with all rights and obligations pertaining thereto by way of dissolution without winding up to DTAG pursuant to a statutory merger by way of absorption (Verschmelzung durch Aufnahme) under §§ 2 et seq., and 60 et seq. of the German Transformation Act (Umwandlungsgesetz, "UmwG") in exchange for the granting of shares in DTAG to the shareholders of TOI AG (other than DTAG) (merger by way of absorption (Verschmelzung durch Aufnahme), § 2 no. 1 UmwG).

(2)
The merger shall be based upon the balance sheet of TOI AG dated 31 December 2004 which will serve as a closing balance sheet and which was provided with an unqualified audit opinion by PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Frankfurt am Main.

(3)
DTAG's assumption of TOI AG's assets shall enter into effect internally upon the expiry of 31 December 2004. As of 1 January 2005, all acts and transactions of TOI AG shall be deemed to have been undertaken for DTAG's account (such date, the "Merger Effective Date").

(4)
In its annual financial statements, DTAG shall continue to use the values of the transferred assets and liabilities stated in TOI AG's closing balance sheet (continuation of book values).


§ 2
Consideration, Exchange of Shares

(1)
As consideration for the transfer of TOI AG's assets, upon completion of the merger, DTAG shall grant free of charge to those TOI AG shareholders, who are not party to this Agreement, in exchange for every
(2)
The shares to be granted by DTAG pursuant to paragraph 1 shall bear dividend entitlements as of 1 January 2005.

(3)
Should DTAG grant a shareholder of TOI AG a supplementary cash payment in order to provide compensation for an undervalued merger exchange ratio, DTAG shall treat all remaining shareholders of TOI AG equally by making a supplementary cash payment of an equal amount.

(4)
The effective date of the valuation of TOI AG and DTAG for purposes of calculating the merger exchange ratio is 29 April 2005.

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§ 3
Special Rights and Benefits

(1)
Except for the provisions agreed in § 4 relating to the holders of stock options, no rights within the meaning of § 5 para. 1 no. 7 UmwG shall be granted to individual shareholders or holders of special rights. Nor have any special measures within the meaning of this provision been planned for such persons.

(2)
Notwithstanding the provisions in paragraph 3 and §§ 4, 7 and 8 para. 11, special benefits within the meaning of § 5 para. 1 no. 8 UmwG shall not be granted to any Board of Management or Supervisory Board member or to an auditor of the companies involved in the merger or to the joint merger auditor.

(3)
Upon completion of the merger, the offices of the Board of Management members of TOI AG shall expire. The employment contracts of four of the affected Board of Management members (Ms. Altmeyer, Messrs. Beaujean, Becker and Hille: Group I—New Contracts) contain a so-called "tie-in" clause whereby on withdrawal from the Board of Management, the employment relationship expires, on a general basis, in return for payment of compensation. The employment contracts of two further Board of Management members (Messrs. Graßmann and Kindt: Group II—Old Contracts) do not contain any such tie-in clause; with these members, whose present contracts expire in September 2005 and December 2005 respectively, TOI AG has in turn entered into extension contracts which contain a tie-in clause, although in view of the targeted merger, only with a term of three years. The individuals of Group II are intended to have overlapping managerial functions in the Broadband/Fixed Network area (see § 7 para. 3). Otherwise, at the time of conclusion of this Merger Agreement, it is not yet certain which Board of Management members of TOI AG should be offered managerial functions at DTAG in the future.


§ 4
Grant of Equivalent Rights
for the Holders of Stock Options

(1)
Pursuant to the authorizing resolution passed at the shareholders' meeting held on 30 May 2001, TOI AG granted rights to subscribe for TOI AG shares in accordance with the 2001 stock option

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(2)
Pursuant to the authorizing resolution passed at the shareholders' meeting held on 17 March 2000, TOI AG granted rights to subscribe for TOI AG shares in accordance with the stock option plan with a tranche in 2000 ("2000 Stock Options"). Upon completion of the merger, DTAG shall grant the holders of the 2000 Stock Options equivalent rights pursuant to § 23 UmwG. In accordance with the merger exchange ratio set out in § 2 para. 1 of this Merger Agreement, each option right shall entitle the holder to subscribe for 0.52 registered no par value shares in DTAG (each share representing a proportionate amount of EUR 2.56 in DTAG's share capital), instead of a registered no par value share in TOI AG (such share representing a proportionate amount of EUR 1.00 in TOI AG's share capital). Otherwise, the terms and conditions of the stock option plan (2000 tranche), which are appended to this Agreement as Annexes 6 and 7, shall apply mutatis mutandis, provided that:

a.
in each case, DTAG will replace TOI AG and 0.52 no par value shares of DTAG will replace 1 no par value share of TOI AG;

b.
the exercise price pursuant to § 2 of the option terms and conditions of EUR 37.65 for 0.52 DTAG shares in each case will be reduced by the amount of any supplementary cash payment made pursuant to § 2 of this Merger Agreement;

c.
the right pursuant to § 1 para. 2 sentence 1 of the option terms and conditions will not be exercised; and

d.
upon completion of the merger, the performance targets set forth in § 6 of the option terms and conditions will be adjusted in accordance with § 17 para. 2, last alternative of the option terms and conditions, such that DTAG will waive the requirement of the performance targets under § 6 of the option terms and conditions to be met given the short remaining term of the stock options (due to expire on 6 July 2005) and the high exercise price compared to the share price (Xetra closing price) on 7 March 2005, the day before the Merger Agreement was concluded.

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§ 5
Capital Increase

        In order to implement the merger, DTAG shall increase its share capital by up to EUR 200,704,000 by issuing from its authorized capital up to 78,400,000 new registered no par value shares with dividend entitlements as of 1 January 2005.


§ 6
Trustee

        TOI AG appoints WestLB AG, Düsseldorf and Münster, to serve as trustee for the receipt of the DTAG shares to be granted. DTAG shall transfer the shares to be granted pursuant to § 2 para. 1 to the trustee prior to registration of the merger in the commercial register of TOI AG and shall instruct the trustee to pass on the shares to the shareholders of TOI AG following registration of the merger in the commercial register of DTAG simultaneously (Zug um Zug) against surrender of their TOI AG shares.


§ 7
TOI Corporate Structure

(1)
The entire business, which will be transferred from TOI AG to DTAG by way of merger, will continue to be a separate organizational unit (hereinafter "TOI") with its own segment board and profit and loss responsibility, and will be an essential part of the new "Broadband/Fixed Network" strategic business area ("SBA BBFN") of DTAG. This arrangement will accelerate the development of the fixed network and broadband markets in Germany and help launch an integrated broadband strategy combining "network access, communication and entertainment services" for the mass market (the so-called "Triple-Play"). TOI's role is expected to encompass in particular the development and marketing (market and deliver) of all IP (Internet Protocol) products in the strategic business area, in particular the Triple-Play package such as T-Home currently projected for Germany as an advancement of the "T-Online Vision on TV". This strategy should thereby facilitate an optimal and sustained utilization of customer relationships in the interests of DTAG and TOI.

(2)
DTAG is the parent company of a group which is active in the entire field of telecommunications, information technology, multimedia, information and entertainment as well as security services. In accordance with a strategic realignment, the DTAG group shall be managed with the following three business areas:

a.
Mobile Communications

b.
Broadband/Fixed Network

c.
Business Customers

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(3)
The Broadband/Fixed Network strategic business area will be managed by a "Departmental Board SBA BBFN". The Departmental Board will have the following areas of responsibility:

a.
Chairman of the Departmental Board (CEO) with responsibility for, inter alia, the company strategy, regulatory matters, corporate communications/public relations, internal control

b.
member of the Departmental Board responsible for finance (CFO) with responsibility for, inter alia, finance, controlling, purchasing and legal

c.
member of the Departmental Board responsible for human resources (CHRO) with responsibility for, inter alia, personnel and organization

d.
member of the Departmental Board responsible for marketing (CMO) with responsibility for, inter alia, the product segment voice/PSTN, the product segment broadband/IP, pricing, terminal equipment, value-added services, customer relationship management (CRM), marketing communications and innovation

e.
member of the Departmental Board responsible for sales (CSO) with responsibility for, inter alia, consumer sales, VSE sales and indirect sales

f.
member of the Departmental Board responsible for IT (CIO) with responsibility for, inter alia, information technology and numbering management

g.
member of the Departmental Board responsible for quality and processes, with responsibility for, inter alia, the overall quality management and processes

h.
Departmental Board member responsible for international affairs, with responsibility for, inter alia, the management of the international shareholdings including business development, controlling of shareholdings and M&A

i.
member of the Departmental Board responsible for net infrastructure (CTO) with responsibility for, inter alia, production/infrastructure

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(4)
The employees and the segment board of TOI will continue to play an essential role in the development of the broadband business of DTAG. They will have special responsibility for the introduction of an integrated broadband strategy. The corporate identity formed by TOI AG will be maintained in the new Broadband/Fixed Network strategic business area and will be promoted by the management of TOI.

(5)
TOI has its main business sites (Betriebsstätten) in Darmstadt (headquarters) and in Kiel, Oldenburg and Ulm (sites). These business sites shall be maintained irrespective of the merger. The organizational integration of the Call Center sites within TOI will be affected in accordance with § 8 para. 2. DTAG and TOI shall generally seek to ensure that the merger has no impact on employment cost structures within the two parties; they will agree on the measures necessary and appropriate to achieve this aim. The affiliated companies set out in Annex 8 shall also retain their current registered offices after the merger.

(6)
The international development of TOI shall be continued successfully in a predominantly organic manner, to the extent possible by way of a Triple-Play approach.

(7)
The management and development of the "Broadband/Fixed Network" business area created by way of the merger will be performed under the purview of the overall entrepreneurial responsibility of the corporate bodies of DTAG. It is the common objective of DTAG and TOI AG to forcefully develop the growth segment of "Broadband/Fixed Network". DTAG and TOI intend to jointly exploit the growth opportunities connected therewith.

(8)
It is not planned to break/split up TOI as an organizational unit within the acquiring entity and in no event will this be subject to discussion prior to 31 December 2007.

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§ 8
Consequences of the Merger for Employees
and their Representatives

(1)
Upon completion of the merger by registration in the commercial register, all employment contracts to which TOI AG is a party will automatically pass (together with all rights and duties thereunder) to DTAG pursuant to § 324 UmwG in conjunction with § 613a para. 1 of the German Civil Code (Bürgerliches Gesetzbuch, "BGB"). The contracts shall not automatically pass if the employee objects to such transfer of his or her employment contract. The transfer of the employment contracts will not have retroactive effect from the Merger Effective Date.

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(2)
No changes in business operations (Betriebsänderungen) are planned as a result of the merger. TOI AG maintains business sites (Betriebsstätten) in Darmstadt, Ulm, Kiel and Oldenburg. Separate works councils (Betriebsräte) have been established at the Kiel and Oldenburg operations. The business sites in Darmstadt and Ulm have, in the past, been deemed an integrated operating site (einheitlicher Betrieb) within the meaning of the law on works constitutions, and for this reason the employees at these two business sites have jointly elected a single works council. The merger shall not change these three employee representative bodies. The same applies to any other representative bodies at operating sites and to the representative bodies for the severely disabled.
(3)
The offices of the members of the Economic Committee (Wirtschaftsausschuss) at TOI AG and the members of the Central Works Council (Gesamtbetriebsrat) shall expire on the date of registration of the merger in DTAG's commercial register. The same shall apply to other representative bodies at the company level, including the Executive Staff Representation Committee (Unternehmenssprecherausschuss), Central Executive Staff Representation Committee (Gesamtsprecherausschuss) or the Office of the Chief Representative for the Disabled (Gesamtschwerbehindertenvertretung).
(4)
The offices of the Executive Staff Representation Committee members at TOI AG shall expire on the date of registration of the merger in DTAG's commercial register. As of that date, the decision-making authority of DTAG's Executive Staff Representation Committee shall be extended to cover the managing employees transferred by TOI AG.

(5)
The offices of the DTAG Group Works Council (Konzernbetriebsrat) members delegated by employee representatives of TOI AG, shall expire on the date of registration of the merger in DTAG's commercial register. The Group's works agreement (Konzernbetriebsvereinbarung) dated 9

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(6)
Pursuant to the agreement dated 21 April 2004, a European Works Council was established in the DTAG Group. Until now, the "TOI Division" has delegated one representative from Germany and one representative from France to this body (annex to the agreement dated 21 April 2004.) It is not clear whether TOI will constitute a "division" within the meaning of these provisions after the merger. § 19 para. 5 of the agreement dated 21 April 2004 provides that in the event that the two parties to the agreement dated 21 April 2004 have different opinions about the meaning and application of this agreement, the Central Management and the Steering Committee (Präsidium) of the European Works Council shall endeavor to reach an agreement within a reasonable period of time. Until the discussions regarding this arrangement have been completed, the representatives delegated by the "TOI Division" shall remain on the European Works Council.

(7)
Upon dissolution of TOI AG, its Supervisory Board shall cease to exist. The offices of the employee representatives on TOI AG's Supervisory Board shall thereupon expire.
(8)
The works agreements and the central works agreements of TOI AG shall continue to apply at the transferred operating sites, unless they are superseded by DTAG's central works agreements on the same subject matter pursuant to § 613a para. 1 sentence 3 BGB. The group works agreements which previously applied at TOI AG shall continue to apply from a collective point of view, unless they are superseded by other collective agreements having the same subject matter pursuant to § 613a para. 1 sentence 3 BGB. Upon completion of the merger, the group works agreements which previously applied at DTAG shall be extended to cover the transferred employment contracts, unless limitations on applicability or scope under these agreements provide otherwise.
(9)
DTAG and TOI AG have agreed with ver.di, the labor union responsible for collective bargaining, on collective bargaining provisions in respect of the merger. Accordingly, on completion of the merger, DTAG's collective bargaining agreement shall not extend to cover the transferred employment contracts since these will be excluded from the scope of the agreement by no later than 30 September 2006 (so-called scope exception (Bereichsausnahme)). In this connection, until a collective bargaining agreement is concluded, DTAG, TOI AG and the labor union ver.di have settled the terms and conditions of the transferred employment contracts in a collective transitional arrangement which—with a few exceptions, in particular an increase in pay rates as of 1 January 2005—will apply from completion of the merger for the duration of the scope exception. These collective bargaining negotiations are led by DTAG, TOI AG and ver.di with the objective of establishing uniform terms and conditions, having special regard to the special features of TOI as well as special provisions for the Call Centers in consideration of general conditions of this branch. This collective transitional arrangement and the collective bargaining agreement to be negotiated in the future shall directly and mandatorily apply to the employment contracts of those employees organized in the trade union, which is a party to the collective bargaining agreement.

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(10)
The company pension plan for TOI AG employees has been agreed in part through employment contract references to the group works agreements and company collective bargaining agreements, and otherwise on the basis of the corresponding standard business practices. The obligation to grant a company pension, which has been agreed in an employment contract or implied through standard business practice, shall pass from TOI AG to DTAG (see also § 8 para. 1). Group works agreements and TOI AG company collective bargaining agreements concerning company pensions will require DTAG to leave terms and conditions unchanged upon completion of the merger (see also § 8 para. 8 and 9).
(11)
Following the merger, the obligations of TOI AG arising from the 2000 and 2001 stock option plans (2001 and 2002 tranches) shall automatically pass to DTAG pursuant to universal succession under § 20 UmwG. Pursuant to § 23 UmwG, DTAG is obliged to grant the holders of stock options equivalent rights. For this purpose, the holders of stock options on shares of TOI AG will be granted stock options on shares of DTAG in accordance with § 4 of this Agreement. Upon exercise of the options, DTAG may elect to pay a cash settlement amount instead of granting shares as provided for in the stock option plans.

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§ 9
Costs

The parties shall bear in equal part the costs resulting from notarization of this Agreement. The same shall apply to costs for execution and implementation of this Agreement jointly generated by the parties. Otherwise each contracting party shall bear its own costs. These provisions shall also apply should the merger not enter into effect as a result of rescission by one of the contracting parties or for any other reason.


§ 10
Change of Merger Effective Date

(1)
Should the merger not have been registered in DTAG's commercial register on or before the expiry of 31 January 2006, then 1 January 2006 will become the Merger Effective Date in derogation to § 1 para. 3. In derogation to § 1 para. 2, the merger shall in this event be based upon the balance sheet of TOI AG dated 31 December 2005, serving as a closing balance sheet, which shall be provided with an unqualified audit opinion by the auditor elected at TOI AG's shareholders' meeting. In the event of a further delay in registering the merger beyond 31 January of a subsequent year, the Merger Effective Date and the closing balance sheet date shall be postponed by one year in accordance with the foregoing provision.

(2)
Should the merger not have been registered in DTAG's commercial register on or before the expiry of 31 January 2006, then the merger shall be registered in DTAG's commercial register only after both TOI AG's and DTAG's shareholders' meetings (at which the shareholders, in each case, will resolve upon appropriation of any balance sheet profits for the financial year 2005) were held in 2006. The Boards of Management of DTAG and TOI AG shall ensure that such registrations are made, if necessary, by filing corresponding addenda to the respective applications with their commercial registers. The foregoing provisions shall also apply mutatis mutandis should the merger not have been registered in DTAG's commercial register on or before the expiry of 31 January of a subsequent year.

(3)
Should the merger be registered in DTAG's commercial register only after the shareholders' meeting of TOI AG in 2006, at which, the shareholders resolve upon the appropriation of any balance sheet profits earned in the financial year 2005, then the new DTAG shares issued in order to implement the merger shall, in derogation to § 2 para. 2 and § 5, bear dividend entitlements as of 1 January 2006, at the earliest. In the event the merger registration is further delayed beyond TOI AG's shareholders' meeting in a subsequent year, the beginning of the dividend entitlements shall, in each case, be postponed by one year pursuant to the foregoing provision.


§ 11
Governing Body Provisos, Right of Rescission

(1)
This Agreement shall enter into effect, if the shareholders of TOI AG and—unless not required pursuant to § 62 UmwG—the shareholders of DTAG respectively approve thereof with a seventy-five percent (75%) majority of the share capital participating in the vote on the resolution.

(2)
Each contracting party may rescind this Agreement if the merger has not entered into effect upon the expiry of 31 December 2007.

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Preamble
§ 1 Transfer of Assets
§ 2 Consideration, Exchange of Shares
§ 3 Special Rights and Benefits
§ 4 Grant of Equivalent Rights for the Holders of Stock Options
§ 5 Capital Increase
§ 6 Trustee
§ 7 TOI Corporate Structure
§ 8 Consequences of the Merger for Employees and their Representatives
§ 9 Costs
§ 10 Change of Merger Effective Date
§ 11 Governing Body Provisos, Right of Rescission